E.V. schools say they're unaffected by AG's raid on insurance group - East Valley Tribune: East Valley Local News

E.V. schools say they're unaffected by AG's raid on insurance group

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Posted: Monday, December 20, 2010 6:00 am | Updated: 2:53 pm, Tue Dec 21, 2010.

East Valley school districts say they have not been impacted by an Arizona Attorney General's Office raid last week on the Phoenix-based group that helps them buy health insurance for employees.

Valley Schools Management Group is the parent operation for Valley Schools Employees Benefit Trust. Chandler, Apache Junction and Queen Creek unified school districts are a few of the districts that use the trust to obtain cost savings when purchasing health insurance.

Questions have been raised in the past year over potential conflicts of interest and whether Valley Schools is mismanaging taxpayer money.

"Valley Schools Management Group has, for months, been cooperating with an inquiry from the Arizona Attorney General's Office," John Hartsell, spokesman for Valley Schools, said in a prepared statement. "VSMG has provided the attorney general's office thousands of documents and the attorney general has, repeatedly, acknowledged VSMG's cooperation."

Special investigators from the attorney general's office also raided the Deer Valley Unified School District's administrative offices Wednesday morning as part of an investigation into possible conflicts of interest involving the district. Two members of Deer Valley's governing board, Bill Maas and Tom Boone, are also members of the Valley Schools executive board.

Regarding the raid, Hartsell's statement read: "VSMG strongly disagrees that such action was warranted or appropriate. Considering the ongoing cooperation VSMG has shown and the timing of this action so close to the end of the attorney general's term in office, VSMG cannot help but question the motives for today's heavy-handed action. VSMG is particularly disheartened that this action has compromised VSMG's ability to service its member districts and their insured teachers and staff."

A call to the attorney general's office was not immediately returned.

Apache Junction Unified School District associate superintendent Jim Lockwood said his district has participated with Valley Schools Employees Benefit Trust for about three years.

The district sought out the trust because of its ability to pool resources and provide more buying power when negotiating health insurance contracts.

"It's a good value for us. It's worked well," he said.

The district is spending about $3 million this year on its self-insurance plan for 420 employees.

"I will be the first to say from my dealings ... and how they're impacting health care: They're doing a phenomenal job," Lockwood said.

Lockwood is one of several school officials from around the Valley who currently sit on the trust's volunteer board. The role of the board, he said, is to make recommendations to the program's administrator and to hear claims appeals.

Chandler Unified School District is also part of the trust. The district contracts with United Healthcare under a self-insured model, said Sandy Cooper, assistant superintendent for human resources. About 2,900 employees receive benefits.

"(The trust) also provides administrative services to Chandler and approximately 20 districts, which includes purchasing, consulting, wellness, bill processing, stop loss insurance, etc.," Cooper said in an e-mail. "There has been no impact to our services due to this week's events."

Queen Creek Unified School District CFO Shari Zara also said the district uses the trust to purchase health insurance - about $2.3 million for its employees.

"Our health benefits are still running smoothly. We've had no interruption of service," she said.

The Daily News-Sun contributed to this report.


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